Household Debt Soars to 37 Trillion Won in the 2014 Banking Sector

According to the Bank of Korea, the household loan balance increased by 37.3 trillion won year on year and reached 560.9 trillion won (US$518.7 billion) at the end of 2014 in the banking sector.

The increase, which is equivalent to approximately 160 percent of that of 2013, reached a new high since 2008, when the first data was made available for comparison.

It was mortgage loans that led the trend. The total increased by 35.5 trillion won (US$32.8 billion) last year, while the increment had been 20.7 trillion won (US$19.1 billion) in the preceding year. This can be attributed mainly to the central bank’s double key rate cuts and the government’s relaxation of housing market regulations last August.

Under the circumstances, the government is planning to come up with new measures to tackle the household debt problem.